The long-anticipated outside audit of the Groton-Dunstable Regional School District’s 2013 and 2014 budgets financial accounts show past patterns of poor financial controls by the district administration and a lack of communication of financial information upward to the school committee. The audit, conducted by CPA firm Melanson, Heath, & Company, recommends revised budgeting and accounting procedures and monthly financial updates from administrators to the school committee.

The report states that ” … we did not find any evidence that came to our attention indicating any material errors, irregularities or illegal acts as a result of this engagement,” bearing out district officials and administrator’s insistence that no criminal acts of any kind were involved in the FY 13 and 14 deficits.

Jared Stanton

The audit was sent to the district on Monday, March 3. A week after the report arrived in district administrators’ offices, on March 10, a version was released by Jared Stanton, the district’s Director of Business and Finance. Copies went to the School Committee and members of the several town boards and individuals that have been involved in resolving the continuing fiscal crisis — the Groton and Dunstable selectmen and Finance Committee members, and Groton Town Manager Mark Haddad.

Stanton told the School Committee during its Wednesday March 12 meeting that the report had one error that needed correcting and then the full report will be posted to the District website “very soon.”

Committee member John Sjoberg asked if the report would assuage fears that the District never be faced with a budget crisis like the current one. “We need to know how you are doing your job to assure that this will not happen again,” he told Stanton.

Stanton replied that the report “does show how we got into this situation and how we can make sure that it doesn’t happen again.” He added that Groton Town Manager Mark Haddad “said he is comfortable with the report.” Haddad could not be reached for comment.

The cover letter from the accounting firm includes a description of the work it performed and a disclaimer:

“We performed the following agreed upon procedures:
(1) Reviewed and analyzed the fiscal 2013 budget and actual reports and other records to determine the cause of the 2013 deficit.

(2) Reviewed and analyzed the fiscal 2014 budget and actual reports and other records to identify areas of the budget that are underfunded and may result in a deficit for the year.

(3) Assisted the District in identifying remedial action to mitigate any projected deficit in fiscal 2014.

(4) Made recommendations in the budget development process to prevent further deficits from developing.

Because the agreed-upon procedures referred to above do not constitute an examination in accordance with U.S. generally accepted auditing standards, we do not express an opinion on the financial statements of the Groton-Dunstable Regional School District.

The Groton Line contacted several people who reviewed the audit, and none wished to speak on the record because it has not yet been discussed in any official board meetings. Reactions ranged from a neutral “It’s about what I expected,” to “I was horrified — more than 70 line items were over budget.”

Other highlights from the 26-page report include:

A pattern of deficits in special education accounts — almost $1M in 2012 and $1.2M in 2013. The 2012 deficit was paid for with surpluses in other accounts, but those surpluses didn’t exist in 2013.

“In our opinion, the fiscal 2013 deficit was caused by level funding the budget despite losing one-time federal grant funding and having to deal with continuing increases in special education costs.”

Validation of Stanton’s work on the 2014 budget: “The Director of Business and Finance has spent a substantial amount of time analyzing the 2014 budget and has projected a deficit of $804,111.59. We have confirmed the budget and actual numbers in the projection and reviewed the end-of-year projected surplus and deficit calculations and agree with the estimates provided. “

That lead to the conclusion of “From fiscal 2012 through fiscal 2014, the District has had minimum increases in voted appropriations and has covered deficits in special education accounts from surplus E & D, one-time grants, and savings in health insurance accounts. However, by the end of fiscal 2014, there will be no more surpluses in those accounts to continue covering underfunding of special education costs.”

School Committee Chair Alison Manugian said at the Wednesday meeting that the public, “Will have the chance to review the audit and bring questions to the March 26 meeting” so the Committee can answer them.

Million dollar deficits in special education accounts — how does that happen in the first place, never mind how does it happen more than once without making changes to prevent the crisis we are now facing?

Just a reminder that poor accounting practices with regard to special education accounts does not mean the special education expenses themselves are unwarranted. The School Committee has stated often that most special ed expenses are largely out of the District’s control because the schools are mandated to provide services to students who need them. If the business office and district leadership did not budget, account for and pay those expenses properly, it does not mean those expenses constituted overspending. The District’s decision to outsource special education transportation, however, is one that ended up costing more money than anyone anticipated, and that factors significantly into this budget scenario.

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Thomas E. Wyatt of Fitchburg, died on March 24, 2015 at his winter home in Spring Hill, Florida. He was born on the Williams farm in Groton Massachusetts on June 30, 1942, son of the late Alfred and Mary Williams Wyatt. He grew up in Groton and ...